Chelsea building society loses £41m to fraud
Chelsea building society loses £41m to fraud
Friday 21st August 2009
The Chelsea building society has said today it lost £41m to mortgage fraud.The company blamed the fraud as one of the main reasons for overall losses of £26m in the first two quarters of this year, with the chairman of the company saying they had been through a "difficult period".
The uncovered £41m of fraud was discovered within Chelsea's buy-to-let mortgage book, related to lending mainly between 2006 and 2008. The company abandoned buy-to-let last year.
In their six-months to June results, Chelsea recorded new lending of £242 million focused on low risk, less than 75 per cent loan to value (LTV) business residential lending, and supported a "commitment to return to the values of the traditional building society model".
Last year Chelsea lost £39m, the largest annual loss recorded by any building society.
Stuart Bernau Chelsea’s chairman and interim chief executive said: "The society has been through a difficult period and reporting a loss in the first half of the year is disappointing. However the underlying performance is strong even though we have had to make provision for impairment and fraud losses.
"In a competitive market, we have continued to attract strong retail inflows with our savings accounts increasing by over 38,000 in the first six months of the year, a testament to our strong and trusted brand. Our mortgage lending is now fully covered by our retail deposits and this has significantly reduced our reliance on wholesale markets.
"This is a good platform from which to build and we are concentrating on the society’s strengths by returning to its traditional values. We will continue to focus on providing excellent value and service to our members and Chelsea remains well placed to benefit from any recovery in the economy and housing market over the coming months."
The building society added early indications are that in the last two months the number of mortgage accounts in arrears is levelling off.
Related News
Rail passengers 'being taken for a ride' - 20/08/09
Rail passengers are being taken for a ride by rail staff who give them poor advice on fares, a consumer watchdog has found
Rail passengers are being taken for a ride by rail staff who give them poor advice on fares, a consumer watchdog has found
FTSE 100 up 1% - 20/08/09
Financial stocks led the FTSE 100 higher in early trade, on renewed economic optimism
Financial stocks led the FTSE 100 higher in early trade, on renewed economic optimism
FTSE 100 closes flat - 19/08/09
The FTSE 100 ended flat, with gains in financial and mining stocks balancing a fall in the defensives sector
The FTSE 100 ended flat, with gains in financial and mining stocks balancing a fall in the defensives sector
'Level playing field' for UK workers - 19/08/09
The Migration Advisory Committee (MAC) outlined proposals to "level the playing field" between UK and non-EU migrant workers today
The Migration Advisory Committee (MAC) outlined proposals to "level the playing field" between UK and non-EU migrant workers today
Bank committee stops governor from printing more money - 19/08/09
The Bank of England governor was prevented from injecting an extra £25 billion into the UK economy this month, minutes have revealed
The Bank of England governor was prevented from injecting an extra £25 billion into the UK economy this month, minutes have revealed
News Article Search
Quick Apply
News Archive